UK buyers keep their distance as mills post elevated HRC offers

Market activity for hot-rolled coil remained subdued in the UK on the week of Jan. 8 with elevated offers matched against thin buying interest amid an uncertain outlook for demand.

“It is still early days for demand,” a trader source said. “No one is convinced that the higher prices will stick, and buyers are not rushing to jump back into the market following the holidays.”

Offers from European mills were generally heard across a range of GBP680-GBP700/mt with one major European producer heard offering as high as GBP750/mt DDP West Midlands.

Mill sources said that the price increases were reflective of the fact that European production capacity for first quarter delivery is nearly sold out.

Conversely, the near-term demand outlook remains highly uncertain with stockholders suggesting that activity over the next 2-3 weeks will be crucial in determining the outlook for the market.

Market participants estimated tradable values at GBP680-700/mt DDP West Midlands.

Platts assessed the price of domestic HRC in the UK up GBP40/mt from Jan. 4 at GBP690/mt basis DDP West Midlands Jan. 11.

Sources remained concerned about additional supplies coming into the market if major European mills restart their blast furnaces in coming weeks amid an uncertain outlook for demand.

Offers from Vietnamese mills were heard at GBP660-680/mt DDP West Midlands.

Author: Euan Sadden,